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Wednesday, December 5, 2012

Moneys sent by Gambians abroad constitutes 10% of country’s GDP, exceed total export

Amadou Kolley

Remittances to The
Gambia, moneys sent to The Gambia by Gambians in the Diaspora, has
now been increasing more than ever and as of 2011, it constitutes up to 10% of
the country’s Gross Domestic Product - more than the total monetary value of
the country’s export which constitutes only 8 to 9% of the GDP.

The Central Bank Governor Amadou Colley
said in The Gambia, remittances as a percentage of the GDP has grown over time
from a mere about 3 – 4% in the 1990s to nearly 10% of the GDP in 2011. In addition, he said, it has become one of
the largest sources of foreign exchange for the country.

Despite this significant contribution to
the national economy, Governor Colley said The Gambia is still at the
developmental stage to harness the full potentials of remittances.

In a statement read on his behalf by Ismaila Jarju, director of
research at the Central of The Gambia during the launching of the Least Developed Countries (LDCs) report 2012 on
Wednesday at the Ocean Bay Hotel in Bakau, Governor Colley noted that
most of the remittances flows are channeled into consumption though it also
plays a significant role in housing financing and it is also a key driver in
other sectors such as the wholesale and retail trade.

Governor Colley said few years ago, the Central Bank in
collaboration with Gambia Investment and Export Promotion Agency conducted a
survey in the real estate sector and found out that most of the investments in
that sector are done by Gambians in the Diaspora.

“When the financial crisis stuck, we reviewed the data and also we
showed that it was actually impacted.
Though remittance was still coming in but the funds that were channeled
to the real estate sector actually went down because of the recession in the
global economy,” he said.

He noted that ways to liberate
remittances for housing finance will be valuable for this country. To this regards, the CBG has been working
assiduously to improve the payment system.
This is to reduce the cost of remittances because its cost is very high
in this part of the world and this makes access a bit difficult.

So we have been working to
upgrade the payment system also. This
development is part of efforts at modernizing and upgrading the country’s
payments, clearing and settlement system infrastructure.

With
this new development, the banks are required to process cheques
deposited/lodged or payment instructions for remittances received the same
business day as long as the transaction occurred within workings days and
between the hours of 8:00 am and 1:30pm.

“This we did in a bid
towards the reducing the cost of remittances,” he emphasized.

He
said work is also underway to improving the regulatory environment
affecting remittances because The Gambia’s financial sector is very shallow as
a result most of the regulations concerned the formal banking sector.

“This is also an obstacle to some of the
informal channels that received remittances to The Gambia. Now, one very important challenge we have in
this country is the fact that data reported on remittances is the one we
obtained through the formal banking systems as well as the bureaus.

However, we all know that in developing
countries the informal channels account for big chunk of remittances flow, and
this is normally unaccounted for.

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The Publisher of this blog - Lamin Jahateh - is a professional journalist, with many years experience in journalism. Mr. Jahateh attended both national and international trainings on journalism. He is an executive member of many professional organisations, including Network of Journalists Against Money Laundering and Terrorist Financing in West Africa, Freedom House - The Gambia Chapter, Young Journalist Association of the Gambia, etc